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Nigeria Electricity Regulator suspends electricity tariff increase till June 2020
The Nigerian Electricity Regulatory Commission has suspended the proposed increase in electricity tariffs initially slated for Wednesday 1st April 2020.
NERC had on January 4, in its Minor Review of Multi-Year Tariff and Minimum Remittance Order for the 11 Discos, said that consumers would start to pay more for electricity from April 1.
The power distribution companies had filed applications with the commission for a review of their respective end-user tariffs.
The regulator said on Tuesday that public hearings were held at different locations within the franchise areas of the Discos from February 25 and March 9 to consider the applications.
It said the wide metering gap in the Nigerian electricity supply industry, currently at about 60 per cent, “is a major impediment to both an immediate tariff review and revenue protection for Discos.”
According to NERC, customers of the 11 Discos are willing to pay appropriate rates for services rendered by the Discos but this willingness is conditioned on guaranteed hours of supply, quality of power and adequate metering.
“There shall be no increase in tariffs of end-use customers on April 1, 2020,” the commission said in a new order.
It said the December 2019 Minor Review of Multi-Year Tariff Order 2015 and Minimum Remittance Order for the Year 2020 would remain in force until June 30, 2020, when a new minor review order would be issued by the commission.
“The Federal Government of Nigeria shall provide tariff support during the transitional period to full revenue recovery ending on June 30, 2021, based on the under-recovery of the revenue requirement determined by the commission,” NERC said.
It, however, said the support would be within the context of funding that is available under the Power Sector Recovery Programme Financing Plan.
NERC directed all the Discos to submit a detailed plan for the attainment of full recovery of prudent costs and allowed return on capital by June 30, 2021.
It said the revenue recovery and financial sustainability plans should be submitted no later than April 21 2020.
“All future tariff reviews shall be on the basis of consultations between the Disco and customer clusters with firm commitments on rates and quality of service.
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